Strategies to Minimize Cash Losses in Business During a Pandemic
Successful business owners usually try to cut down on losses while boosting their profit margins. As a manager, you must see that you and your employees deliver your maximum output while putting measures in place to guard the business against financial constraints. Reports suggest that over 100,000 restaurants went out of business this year, due to the COVID-19 pandemic. Irrespective of the size of your business, the following tips could help you avoid being a part of this statistic by minimizing your financial losses even during the coronavirus pandemic.
Review your Business Plan
Developing a feasible business plan is the number one step to launching your start-up, and a good one could help your business survive for the long term. Although founders usually draw their business plans in the early phase of their growth cycle, they shouldn’t end there. You have to continuously work on your business plan to ensure that it’s leading you to the right destination.
As new technologies get introduced every year, you may want to revise your business plan to cut down on losses. Sometimes an old business plan needs to be altered along the way due to legislative changes and other unforeseen circumstances such as the coronavirus pandemic. When you keep your business plan up to date, you can stay focused on your core goals and minimize the amount of time you waste on unprofitable business initiatives.
Minimize Cash Losses in Business: Reduce the Size of Employees
Statistics show that many services and administrative business departments can be reduced by one in four without causing any negative impact on the quality of work. Some businesses can even handle one in three cuts with no profound negative effect on efficiency. It’s up to you to look at your staff numbers and see how you can cut down your team size without any dire consequences. Keeping more workers in your wage bill can be a counterproductive decision, especially in these troubling times of the coronavirus pandemic. But when you reduce the team on your payroll, you can reduce your expenditure and avoid running into insurmountable debts. Also, consider eliminating tasks that add no real value to the business.
Minimize Cash Losses in Business: Go Green
Perhaps you may have already noticed that many companies are going green in recent years. The fact is that sometimes this transition has more to do with saving money than ethical concerns. For example, companies that are installing energy-saving light bulbs or migrating to paperless platforms can minimize financial losses in almost all departments of their businesses. When your company is able to reduce its carbon footprints, they can end up saving fortunes.
In the age of the coronavirus pandemic, some companies are switching to virtual platforms to hold business meetings. This doesn’t only keep them safe from the virus; they can reduce their carbon emissions since there is no need to travel lengthy journeys. For some businesses, paperwork often constitutes a large portion of their expenditure; companies spend tons of resources printing documents and distributing them. Going green and adopting paperless systems can help lower your printing bills.
Prioritize Health and Safety
In the current business world, litigation issues frequently confront entrepreneurs. You probably don’t want to lose money settling lawsuits as a result of negligence on your part as a manager. Therefore, prioritize the health and safety of your workers to avoid risking their lives and attracting lawsuits. Minimizing your legal risks starts with keeping your employees safe. For example, if you own a construction company, you may want to identify the most common types of construction accidents and how to avoid them.
Too many accidents in the workplace can negatively impact your quest to boost efficiency. And when you have healthy and happy employees, productivity can go up. You can consider working with a dedicated safety officer and also attend seminars on occupational hazards and safety procedures. As the coronavirus pandemic lingers on, provide the necessary safety equipment for your workers, and set up contingency plans in case of emergencies.
Minimize Cash Losses in Business: Outsource
Outsourcing is becoming a common business trend for many right reasons, including minimizing losses and improving workflow. Although there may be a few downsides to outsourcing, companies report that outsourcing saves them money and helps them streamline their operations. The good news is that different businesses can outsource several aspects of their tasks according to their own need.
You just have to look at your business sectors, employees’ experience, and work demands to understand which tasks need to be outsourced. From social media management to product delivery and marketing, you can hire virtual assistants to improve your business operations. Outsourcing allows business owners to assign boring tasks to third-parties while saving time to work on the profit-generating aspects of their businesses.
Defend Business Against Cash Scams
Business ecosystems frequently suffer attacks from hostile actors. Once you make up your mind to be an entrepreneur, embrace the fact that malicious actors such as cyber-criminals will be targeting your financial resources. These professional con-artists are becoming a headache to many businesses, especially those dealing with financial assets. Since cash scams have been making waves in the business world, you may want to train your staff to defend your business against these threats. Educate your team on the most common cash scams and how to steer clear of these dangers.
Fraudsters learn new tricks every day, so you need to update your training manuals regularly. You need to store your finances securely to minimize the risks of losses. One way is to revamp your cybersecurity protocols and defend your business against data breaches. Both small and large companies can suffer losses as a result of data breaches. Therefore, you should take it seriously, no matter your business size.
Use Advanced Technologies to Eradicate Cash Loss
It’s a fact to state that achieving a 0% cash loss is virtually impossible to achieve in the long term. That’s because no matter how you train your staff, they are still prone to making mistakes. After all, to err is human. But, when you adopt advanced technologies, you can minimize your risks of cash losses even better. Consider implementing cash management technologies across your business departments to curb cash losses. For instance, intelligent cash drawers (SmartTills) can help your team discover transaction errors as they happen or in real-time.
This way, corrective measures can be put in place to address mistakes immediately and minimize losses. Let advanced machines complement your hard-working employees; gradually, cash loss mistakes will become a thing of the past. At the same time, intelligent machines can help you track down unscrupulous employees who may be trying to steal from you.
Revise Pricing Model
The price of your products can cause you to lose money, especially if you are selling below the market price. So, review your billing rates and increase them to improve your profit margins. Can you add more value to your product? How can you increase the efficiency of your marketing strategies? Answering these questions is critical to boosting profits.
Some businesses set relatively low prices for their products during the early phase of their existence. However, there’s nothing wrong with raising your prices when you know you have added value to your products. Business owners who hardly sit down to review their pricing models end up shooting themselves in the foot.
Weigh your Staffing Options
For sure, every company wants to hire the best staff. But now and then, people hire workers without actually taking time to examine their skill set and work ethics. When you announce job openings, be strict with your demands for a high level of work experience and relevant skills. Experienced workers may take higher salaries, but they will surely give you value for your money. An alternative strategy to reduce your wage bills is to hire entry-level employees and offer them on-the-job training.
Hiring interns is another strategy to reduce your expenditure. Young interns who have a passion for the job may display a high level of efficiency at the workplace. They may also have up-to-date knowledge of modern business trends and other technical issues that your older staff may be missing. The bottom line here is that bringing on board less expensive interns or part-time workers can help you minimize your expenses.
Minimize Cash Losses in Business: Avoid the Cover-up Culture
It’s unwise to cover up cash losses when they occur. Discourage your workers against the use of cover-up schemes or slush funds as these can mar your efforts to crack down on theft cases. Even trusted employees, you count on to fight against cash losses may slip and err in that regard. Instead of trying to hide the problem, shed some light so that it is easier to solve. Irrespective of the extent of damage, cash loss issues, when covered up, may cause internal theft cases to increase. Report and punish perpetrators to serve as a deterrent to others.
As the Covid-19 continues to impact many businesses’ finances, consider applying the above tips to minimize your cash losses and increase your earnings.